EFFECTS OF GLOBALIZATION THE CASE OF PAKISTAN

CORPORATE REQUIREMENT Reduce costs of production: (a) Set-up production facilities in low wage economies; (b) Use suppliers who can minimize cost of production; (c) Ensure maximum utilization of informal labor.

Cost Reduction Leads to employment of cheap (women, children) and un-organized (no trade unions) labor; Leads to reduction in facilities provided to the labor; Leads to further exploitation of the poor by threat of withdrawal of production from the area.

Effect on the Poor Maximum utilization of informal labor Minimum wages: take-it or leave it attitude Lack of facilities for travel to/from work, food, mothers with infants, maternity leave, or even accident compensation.

Examples Football and leather industry Nike Tannery pollution Surgical equipment industry Child Labor

What is the solution? Make “protection of the poor” good for business Promote moral awareness of the consumers: “blood diamonds” and “Conflict free certification”. Provide incentives for protection of the poor Requires legislation and change in attitude

What the Governments need to do Effectively implement labor laws protecting the rights of the poor Provide tax incentives for socially beneficial corporate expenditure Require social responsibility as part of sovereign concessions (replicate oil & gas, mineral policies in telecom, banking, pharmaceutical and other sectors)

Role of Multilateral Agencies Soft loans to NGOs and Governments for raising awareness of rights Soft tied-loans for corporations promoting and/or adopting policies which protect the rights of the poor Create a market similar to those for carbon credits/CERs

Role of NGOs Advocate for the rights of the workers Increase awareness among the workers Advise on and monitor the implementation of socially beneficial policies Coordinate and direct the efforts of the Government in Public-Private Partnership Projects like the Kasur Tannery Waste Management Agency

Conclusion Effects of globalization are more beneficial than detrimental to the rights of the poor It is not globalization per se which is at fault: it is the inability of the developing countries to protect their poor from the profit maximizing corporate policies of the developed countries